Controversial Western Cape Judge President John Hlophe is back in the spotlight following his contested handling of a High Court matter involving allegations of a multi-million rand fraud. One side in the dispute claimed they had a ‘reasonable apprehension’ that the judge was biased against them. And the Supreme Court of Appeal has now set aside Hlophe’s disputed orders and findings, agreeing that, given his behaviour, this ‘apprehension’ was justified.
Hlophe is at the centre of a still unresolved complaint before the Judicial Service Commission over allegations that he tried to influence the outcome of a Constitutional Court case via conversations with judges in the matter. Those claims related to events in 2008 and concerned the workings of another court. The latest issue, however, concerns allegations about his handling of a case in his own court.
At its heart is a legal battle involving businessman Matthews Mudlauzi whose estate has been sequestrated following a dispute with Old Mutual and Nedbank. During 2009 he invested R33.5m in a five-year policy with Old Mutual, that was due to mature in June 2014. In 2011 he finalised a written cession of this policy with Nedbank. But thanks to a staff error, Old Mutual did not endorse the policy in favour of Nedbank.
When the policy matured in June 2014, Mulaudzi applied to Old Mutual to pay out the policy, worth more than R48m at that stage. Old Mutual complied, in the mistaken belief that he was still the owner of the policy. A month later Nedbank asked Old Mutual for payment of the policy. Realising its mistake, Old Mutual paid Nedbank the full value and has ever since been trying, unsuccessfully, to get Mulaudzi to repay the R48m.
Once Old Mutual reported the matter to the police in August 2014, the National Director of Public Prosecutions (NDPP) became involved. That same month the NDPP, using the Prevention and Combating of Corrupt Activities Act (POCA), won a provisional restraint order against Mulaudzi and his wife as well as three of his businesses, under which a curator was appointed to take charge of his property. The matter of this restraint was to have been fully argued in November 2014, but during September Mulaudzi brought the date forward. Hlophe, who presided in that September hearing, set aside the restraint order against Mulaudzi. And it is this hearing and outcome that caused the dispute, heard in the Supreme Court of Appeal, over Hlophe’s ‘perceived bias’.
In their decision those judges said it was ‘no small matter’ that one of the litigants questioning whether Hlophe brought ‘an impartial and open mind’ to the hearing was the NDPP – an officer of the court and thus ‘no ordinary litigant’.
Essentially, Old Mutual and the NDPP listed four grounds as the basis for their ‘reasonable apprehension’ that Hlophe was not impartial in his handling of the hearing.
* There were two other judges on duty on the day the matter was heard, yet Hlophe decided to deal with it himself;
* Mulaudzi’s attorney in the case, Barnabas Xulu, is also Hlophe’s personal attorney in the pending misconduct case at the JSC;
* Hlophe gave his decision in court immediately, and without reasons – yet he would not have had time to read the papers given to him just minutes before the start of the hearing;
* When he was asked for reasons, those reasons made no mention of the argument raised by the other side, but mentioned only the case put forward by Mulaudzi.
As a result, said Old Mutual, it ‘reasonably apprehends’ that Hlophe was ‘influenced by his relationship with … Xulu to hear the matter himself’ and to set aside the restraint order immediately.
In his written response to the case brought in the Appeal Court, Hlophe said it would be ‘absurd, unjust and perverse’ to hold that Xulu may not instruct an independent advocate to appear before him (Hlophe) ‘simply because he (Xulu) happens to represent me in pending litigation in totally unrelated matters’.
The appeal judges examined the law on recusal of judges and the test for ‘reasonable apprehension of bias’, and disagreed with him. They said: ‘It must be accepted … that the long-standing professional relationship between the Judge President and his personal attorney, who has represented him in various judicial and quasi-judicial tribunals since approximately 2009, and who continues to do so, in grave disciplinary proceedings, gives rise to the reasonable apprehension that in the light of the particular nature of that relationship, the Judge President would not bring an impartial mind to bear on the adjudication of a matter brought before him by his attorney.’
But, said the appeal judges, in Hlophe’s case the ‘apprehension of bias’ was not limited to the fact of this relationship between him and Xulu. It was ‘strengthened’ by the other factors mentioned by Old Mutual and the NDPP.
When Hlophe finally gave his reasons for setting aside the restraining order, the document ran to six pages but the actual reasons were contained in just one paragraph. This, in a matter ‘that was neither easy nor clear’, ‘fortifies the view’ of Old Mutual and the NDPP that Hlophe ‘whether consciously or subconsciously, was partial to … Mulaudzi’s cause’.
From a close analysis of Hlophe’s reasons for setting aside the restraining order, the appeal judges concluded that he had ‘misdirected himself’ for example, with his finding that Mulaudzi had ‘committed no criminal offence in gaining access to these funds’. Taken together, all these facts ‘justified’ the complaint by the parties of a reasonable doubt about Hlophe’s impartiality when he considered the case. And as a result his order setting aside the restraining order had to be scrapped.
The proceedings before Hlophe amounted to a ‘nullity’ and the matter had to be heard again, this time by a different judge. In the meantime, however, the restraining order has been ‘revived’ and continues to operate against the insolvent estate of the Mulaudzis.
- First appeared in Legalbriefs on June 8, 2017